Republicans Are Determined to Keep Credit Card Late Fees High
For all the time Republicans spend complaining about the economic struggles faced by everyday Americans, they remain steadfast in their commitment to ensuring major corporations can continue squeezing their customers.
Late Wednesday afternoon, the GOP-controlled House Financial Services Committee voted to advance a bill that would repeal a new Consumer Financial Protection Bureau (CFPB) rule that drastically reduces the caps on credit card late fees — from $30-$41 to $8. The legislation would also repeal the CFPB’s ban on automatic adjustment of late fees due to inflation. In the Democratic-controlled Senate, where the bill is expected to fail, a similar repeal measure was introduced by Banking, Housing, and Urban Affairs Committee Ranking Member Tim Scott (R-S.C.) — who has recently devoted most of his energy to fawning over Donald Trump — and co-sponsored by 12 other Republicans.
“Credit card companies penalize consumers with exorbitant late fees that far exceed their actual costs, raking in billions of dollars in profits on the backs of those who can least afford it,” said Chuck Bell, advocacy program director for Consumer Reports, in a statement urging Congress to reject the repeal. “The CFPB’s new late fee limits restore vital guardrails against excessive charges as Congress intended and will greatly benefit consumers, especially families living paycheck to paycheck and doing their best to manage expenses.”
According to Republicans on the committee, however, lowering late fees will “harm consumers by shifting costs to responsible consumers who pay on time in the form of higher annual fees and higher interest rates,” while remov[ing] incentives for timely payments.”
An analysis published this week by the watchdog group Accountable.US found that Republicans on the committee have “received over $7.9 million from industry groups against this rule and the largest credit issuers.”
Several of those who voted for the repeal, including Reps. Mike Lawler (R-N.Y.), Zach Nunn (R-Iowa), and Monica De La Cruz (R-Texas) are facing competitive reelection races in November.
“The Committee should put consumers poised to save billions before their industry megadonors. Big bank CEOs that boast of billion-dollar profits after nickel and diming Americans with junk fees don’t need more special treatment from the MAGA Congress,” Liz Zelnick, Accountable.US’ Director of the Economic Security & Corporate Power, said in a statement ahead of the vote.
In October, the White House announced a push to eliminate junk fees and increase rate transparency for consumers across various industries. The initiative includes a proposed rule that would require companies to show the full price of a product, fare, or ticket up front and bar them from “charging hidden and misleading fees.” Earlier this week, The Wall Street Journal reported that the Department of Justice’s antitrust division is preparing to file a lawsuit against entertainment giant Live Nation over their infamous use of fees to inflate ticket prices.
The proposed policies are incredibly popular among consumers — and incredibly unpopular amongst Republicans hellbent on denying Biden any victory in an election year.
In February, Rep. Marjorie Taylor Greene (R-Ga.) came out against a Biden administration proposal to eliminate airline seat selection fees for families with children. “What’s next? Joe Biden using his power as president to demand kids eat free at all restaurants too? Why don’t you do your job and CLOSE THE BORDER instead of pandering for votes!!!” Greene wrote on X, formerly Twitter.
If Republicans want to brand themselves as the pro-junk fee party to stick it to Joe Biden, they’re welcome to do so.